Despite tariffs on Canadian lumber increasing demand for domestic production, U.S. sawmills are not fully utilising their capacity. According to the National Association of Home Builders, utilisation rates continue to decline, reaching 64.4% in the first quarter of 2025 on a four-quarter moving average. While sawmill capacity has grown since 2015, it remains below 2011's peak, with most recent gains occurring in 2023 and little progress through 2024.
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The gap between capacity and actual production is largely due to labour shortages, as many mills have reduced their workforce over the years. Additionally, high lumber prices and the reduced foreign competition have diminished incentives to increase production, as boosting output could lower prices amid falling demand since early 2025.
Even during periods of historically high prices in 2021 and 2022, production did not significantly increase, potentially due to supply chain disruptions. The data suggests there is ample capacity to raise domestic lumber production, but current economic conditions and operational challenges continue to constrain output.
Source: www.globalwood.org